Google to cut Motorola jobs
MOTOROLA Mobility, which was bought by Google for $12.5-billion (about R101bn ), will cut 20% of its workforce and shut nearly a third of its offices worldwide, Google said.
"These changes are designed to return Motorola's mobile devices unit to profitability," Google said in a filing with the United States Securities and Exchange Commission. "While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability."
The internet search company expects to take severance-related charge of up to $275-million (about R2.2bn) mostly in the third quarter, it said.
Google, which expects to record the remaining severance-related costs by the end of 2012, said it could also incur other related restructuring charges mainly in the third quarter.
The company said it could not currently predict the amount of these other charges, but added that they could be significant.
The world's number one search engine agreed to buy Motorola Mobility last year, aiming to use Motorola Mobility's patents to fend off legal attacks on its Android mobile platform and expand beyond its software business.
Google had previously reserved its comments on Motorola Mobility's future but is now outlining the first steps to turn the company around, under which the ailing cellphone maker will lay off 4000 employees.
One-third of the jobs lost will be in the US, but the company has not specified where or what facilities would be affected.
Earlier the New York Times reported Google's plan and said it was looking to shrink operations in Asia and India by not just exiting unprofitable markets, but by also not producing low-end devices and focusing on a few cellphones instead of dozens.
Motorola Mobility, which has 94 offices throughout the world, will centre research and development in Chicago, Sunnyvale, California and Beijing.
In addition to the planned cuts, Google has downsized Motorola Mobility's management, letting go 40% of its vice presidents, but has also hired new senior executives.
Shares in Google rose nearly 2% to $652.50 (about R5311) in trading before the bell yesterday. They closed at $642 (about R5225) on the Nasdaq on Friday.